How to Get an iPad 2 for $124 [Update: Hurry!]

Do the math. Gazelle is buying back old iPads, starting at $375. iPad 2s are $499. Also, Apple's quietly selling iPad 1s for $399 ($100 off). Here's where to find these deals, and the answer to the question, "Who the hell's Gazelle?"

The introduction of the iPad 2 leaves a slew of iPad owners with outdated devices in its wake. But there's no need to wallow in being left behind. Recommerce site Gazelle is attempting to drum up business by offering up to $595 for old iPads—so you can, in other words, practically trade in your old iPad for a new one.

Meanwhile, Apple is also offering $100 off the last generation of iPads. But rest assured that if you buy a new one, you'll probably be able to cash in on it when the iPad 3 comes out, thanks to Gazelle.

Gazelle's payouts start at $375 for the old iPad 16GB with Wi-Fi (retail: $499) and range up to $595 for the 64GB Wi-Fi+3G version (retail: $829). Prices will only stay at their current rate until Saturday tonight, when Gazelle lowers the cash payouts for each model. In the meantime, customers can simply sign up at Gazelle, ship their iPads to the company within 30 days (the deal expires after that), and get big bucks in return.

So who the hell is Gazelle and how can they afford to do this? In an email to Fast Company, a Gazelle rep explains, "The product should
maintain great resale value and they have a strategic distribution channel that
allows them to profitably ensure items are reused. It's purely margin vs.
volume. They are electing to take smaller margins in order to drive hopefully
higher volume."

EBay's Instant Sale is advertising a similar deal for customers that want to sell their old smartphones so that they can afford the Verizon iPhone. The site is offering a $200 minimum for the iPhone 3GS, iPhone 4, HTC EVO 4G, and Samsung Galaxy S Vibrant.

Happy shopping!

UPDATE: Hurry! Gazelle just wrote this in a follow-up message to Fast Company: "In an unusual turn of events, Apple has dumped their iPad inventory into the used market, significantly swelling the supply and ultimately driving down prices. Gazelle will not be able to maintain the prices through Saturday, and they may even drop as early as tonight. They’re trying to hold out on them for as long as possible before it becomes a net negative offer."

The iPad deal is also being put into overdrive because of demand. Gazelle has already received thousands of requests for the trade-in offer within hours of the iPad keynote, making this the single highest trade-in volume in one day for any product on the site. That, combined with Apple's inventory dump, is "putting the resale market pricing chart in fast forward," according to the company.

As of 5 p.m. EST, prices have already started to drop. One reader tells us that he was quoted $283 for a mint condition iPad 16GB with Wi-Fi.

Follow Fast Company on Twitter. Ariel Schwartz can be reached by email.